IBFed responds to Basel consultative document on Operational Risk – 12/04/11

12 Apr 2011

IBFed has responded to consultative documents from the BCBS regarding operational risk: the Sound Practices for the Management and Supervision of Operational Risk, and Operational Risk – Supervisory Guidelines for the Advanced Measurement Approaches.  In the response to the Sound Practices consultation, IBFed offered three recommendations to enhance the paper: (1) Include a specific supervisory expectation that financial regulatory agencies should take into account the nature, size, complexity and risk profile of a bank when evaluating its implementation of the operational risk principles; (2) Avoid process-driven board directives in the operational risk principles and do not require the board to take on roles that may detract and conflict with the board’s strategic oversight responsibilities; and (3) Ensure that all principles included in the paper are risk-based and not prescriptive. 

In the letter commenting on the Supervisory Guidelines, IBFed welcomed the efforts of the Basel Committee’s Standards Implementation Group to develop consistent practices for measurement of operational risk and provided technical contributions to enhance the utility of the guidelines.

The IBFed comment letter on the Sound Practices for the Management and Supervision of Operational Risk is available here and the IBFed comment letter on Operational Risk – Supervisory Guidelines for the Advanced Measurement Approaches for is available here.